Record $1.6 Billion Penalty Imposed on PG&E for Deadly San Bruno Explosion

The California Public Utilities Commission this week imposed a $1.6 billion penalty, its largest ever, on PG&E for the unsafe operation of its gas transmission system and the deadly pipeline rupture in San Bruno in 2010.

Eight people died and 38 houses were destroyed in an explosion and fire that followed the rupture of a high-pressure PG&E natural gas pipeline on Sept. 9, 2010. The pipeline segment had a defective seam weld and PG&E improperly listed it in its records as being seamless.

Thursday’s decision by the CPUC at its meeting in San Francisco orders PG&E to pay $850 million in pipeline safety improvements, $300 million to the state’s general fund, $400 million in a one-time bill credit to the utility’s gas customers, and about $50 million toward other pipeline safety measures.

Following the announcement, local Congresswoman Jackie Speier said the CPUC took a “significant step” with the fine:

“While I am glad that the CPUC levied a record penalty and fine of $1.6 billion on PG&E, no amount of money will ever bring back the lives of the eight people who perished in the San Bruno tragedy. For Sue Bullis, who lost three family members and who bravely read a statement today, life will never be the same. But the CPUC took a significant step towards repairing its tarnished record as a lax watchdog and moving towards a culture of accountability and safety. PG&E will be forced to invest the majority of the penalty into pipeline safety at the expense of shareholders, not ratepayers.

“PG&E has indicated that it will not appeal and that is an appropriate position to take. The culture of safety and transparency is one that must be unassailable.”

— Bay City News Service contributed to this report.